Latest market data

Stock search

I am constantly looking for ways to raise the
prices on my products and services so that I can improve the
margins. As you continue to expand your company and improve your
services, you'll one day face the challenge of raising your
prices.

Almost every day you experience higher prices at the grocery
store, gas pump and a range of other places. From time to time,
the government requires you to increase employee wages. Why are
you the only one not raising your prices? You may say, "My
business is so competitive, and it's all price driven." Most
companies make that claim. Your competition may
be unwilling to ask for a higher price, but it doesn't mean you
should be. You are not your competition. You offer a different
service, you are a different company, you have different people
and hopefully what you offer is a better value at any price. To
be successful you must figure know your unique value proposition
-- what it is that sets your apart from others.

Let your competition operate on margins so skinny that they are
barely able to pay their people well, expand their company and
service their clients. I refuse to be the lowest-cost provider. I
am committed to being the highest-value provider.

If you are scared to raise your prices, it may be because:

1. You believe your customer buys only on price.
2. You have lost a sense of your value-added proposition.
3. Your team lacks sales skills and closing techniques.

Higher prices are good for your company. Higher prices allow
increased compensation for your people, the chance to keep up
with higher operating costs and hopefully greater margins for you
to increase services to your clients.

Recently I sent an email to my staff with a new pricing schedule:
"You have 45 days to inform your clients that if they want to
remain on the current pricing, now would be the time to make that
decision as our prices are increasing in the next quarter." This
gave our sales team reasons to close more deals and our customers
an opportunity to take advantage of the lower prices.

Never try to explain the higher pricing by saying: "Due to higher
cost, we are having to raise our prices." Don’t blame inflation.
Instead, increase the value of your offer. No one wants to pay a
higher price and get nothing more.

The challenge with increasing your prices is never convincing the
customer but convincing your own people. When I raised our
pricing, I didn’t check with our people. I made an executive
decision and explained to them when, why and how.

When you increase prices, do it in writing, give choices and,
most importantly, add value to the offer. Explain the reasons
that benefit the customer: added content, additional service or
support. It could be something new or something you haven’t been
telling your clients you do for them. I have never seen a company
fully presents all the things it actually does for its customer.

Seems impossible? Not only did we raise our prices successfully,
we increased the number of sales we made in the following
quarter.

Keep in mind that when you raise your prices you will be
presenting to two groups: new and existing clients. The new
customers don’t know you raised your prices. Show them your value
proposition and justify your price. It is your current clients
that you will be concerned with. These people will divide into
two groups: those aware of the price change and those that don’t
notice it or don’t care. Again, your biggest problems are with
your sales team. Don’t apologize for higher prices. Just present
and close. Your presentation should not be about the new pricing
but about your offering.

The only clients you need to be concerned about are those who
object to the higher prices. For example, we heard: "Last year I
paid only $1,500 and signed for only 12 months." Our response?
"Great, and that is why we are still offering that pricing to you
while increasing new content and additional support. By going
with the 24 months, you can maintain your old pricing."

Higher prices are good for you, your team and your company. And
they should benefit your customer if you are improving your
product and service.